18 October 2023 , 13:38
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Families on Universal Credit face losing up to £1,200 as the Tories threaten to not increase benefits in line with rising prices.
Government ministers have cast doubt on whether payments would go up in April next year - despite warnings many will face a "heavy price". Treasury minister Andrew Griffith said the decision is "yet to happen" and "no promises" could be made on spending and taxes ahead of next month's Autumn Statement.
Inflation remained unchanged at 6.7% in the 12 months to September, new figures revealed today. The reading is typically used to calculate the increase in benefit payments next year. The Resolution Foundation said in an analysis that nine million families would be an average of £460 a year worse off if working-age benefits such as UC are frozen.
A low-income working family with two children would miss out on £1,200 a year, it found. James Smith of the Resolution Foundation said millions of “families across Britain will pay a heavy price".
Becca Lyon of Save the Children UK urged ministers to "do the right thing", saying: “Inflation remains at 6.7% and so does the strain on struggling families’ finances. "Now would be the worst time to cut the incomes of those pushed to the brink.”
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Charities including Save the Children, the UK's largest emergency food provider the Trussell Trust, and the Children's Society, also wrote to Tory MPs demanding benefits rise in line with September's inflation figures. They said: "A difference of one or two percentage points would mean around £127 - £260 less in families’ pockets over the course of 2024-25.
"A budget cut like this would lead to more families falling into debt, more parents having to forgo healthy food in favour of cheaper alternatives, and more children missing out on things like clubs, toys, and days out that are crucial for their development. "As the experience of one of the parents we work with highlights, even a seemingly small amount of money makes a stark difference to family finances and the experiences parents can provide for their children."
But No10 later refused to guarantee that benefits would rise in line with inflation. The Prime Minister's official spokesman said: "The secretary of state has to conduct his statutory annual review of benefits and state pensions using the most recent data, including, obviously, today's figures. So that process will take place." Pressed on why he could not say benefits would rise in line with inflation, he said: "I simply wouldn't get ahead of the process."
Chancellor Jeremy Hunt is also considering tweaking the pension triple lock to reduce a planned increase in the state pension next year. Under the existing policy the hike in the state pension is dependent on whichever is higher out of inflation, average pay, or 2.5%.Those on the new state pension would be £75.40 a year worse off in real-terms under a proposal he is mulling.
The Department for Work and Pensions said benefits were increased by over 10% in 2023 "to protect the most vulnerable from the impact of high inflation". They added: "As is the usual process, the Secretary of State will conduct his statutory annual review of benefits and State Pensions using the most recent data available."
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